no. many people, and big $$$$$$.
Wednesday March 17 8:22 AM ET
Livewire: What Happened To Delphi And Other Onlines?
By Michelle V. Rafter
LOS ANGELES (Reuters) - In the days before America Online was the people's choice for getting online, the most popular on-ramps to what then was called the information superhighway were the proprietary online services: Prodigy, CompuServe, Delphi and Genie.
Today, the world is AOL's oyster. But what happened to the rest?
AOL (http://www.aol.com) snapped up CompuServe (http://www.compuserve.com) from H&R Block last year, promptly sold the latter's network operations to MCI WorldCom (http://www.worldcom.com), and after a quiet 12 months of rebuilding is rolling out an ambitious relaunch called CompuServe 2000.
After eight years of struggle and more than $1 billion in investments, IBM and Sears sold their joint ownership in Prodigy (http://www.prodigy.com) in 1996 to an investor group that repositioned it as an Internet service provider (ISP) and took the company public last month.
After News Corp.'s 1995 attempt to meld Delphi (http://www.delphi.com) into an interactive joint venture with MCI stumbled, the service was sold to an investor group that's recreated it as an online forums expert. General Electric sold Genie (http://www.genie.com) in 1996 to a group of private investors who handed it off to Internet telephony provider IDT Corp. (Nasdaq:IDTC - news) (http://www.idt.net), which let the service's subscriber base slip to a skeletal 5,000.
The former proprietary online services were built around closed programming languages that made it impossible for subscribers to connect to outside services. The popularity of the Internet, and the Web in particular, forced them to evolve or die. Evolve most have, though it's doubtful any can recapture their former glory, according to industry observers.
''It's really hard to turn around a business when you're talking about competition with players that are growing like RCN (http://www.rcn.com), which bundle cable TV and local telephone with Net services, or AOL or Microsoft (http://www.microsoft.com) that have critical mass,'' said Jupiter Communications analyst Zia Daniell Widger. ''To survive, they need to make all the right marketing moves.''
That's exactly what's in the works at CompuServe. The Columbus, Ohio, company is promoting its revamped CompuServe 2000 service as the ISP of choice for cost-conscious adults and small businesses. Unlike AOL and other ISPs that charge a flat monthly rate for unlimited access, CompuServe charges $9.95 for 10 hours a month, $2.95 for each additional hour and premiums for news and research databases.
An estimated 17 million new Internet users will log on this year, many of them adults with no desire to be part of the lowest-common-denominator, glitz-fest that is AOL, said Audrey Weil, an AOL marketing guru before becoming CompuServe's chief operating officer nine months ago.
CompuServe ''is about grown-up content,'' she said. ''You won't find Leonardo DiCaprio hanging out on CompuServe (chat rooms) but you will find Roger Ebert talking about movie reviews.''
CompuServe also hopes to expand into hosting industry-specific private networks, a service it has provided to the aviation industry for more than a decade. In recent months, the company signed deals to co-host a WebMD (http://www.webmd.com) network for doctors, and to run a portal, or Internet gateway, service for MCI WorldCom customers.
Prodigy also chose to stay in the access business. The White Plains, N.Y., company, which is 86 percent owned by Mexico City-based Grupo Carso, now ranks as America's No. 6 ISP with an estimated 650,000 subscribers, behind AOL and CompuServe combined (16 million), MSN (http://www.msn.com) (1.8 million), AT&T WorldNet (http://www.att.net) (1.5 million), and MindSpring (http://www.mindspring.net) and EarthLink (http://www.earthlink.net) (1.1 million each), according to Jupiter.
But in the eyes of Prodigy Chief Operating Officer David Trachtenberg, AOL is Prodigy's biggest rival. Prodigy, invigorated by a 129 percent subscriber jump in 1998, new management and the recent initial public offering, has launched an advertising campaign promoting itself as the best choice for Net users fed up with AOL's pop-up ads and rampant junk e-mail. Later this spring, Prodigy will kick off a bilingual service for Hispanic Net users in the United States and Mexico. In January, Prodigy opened a Web hosting service for small businesses, looking to leverage its technology and other assets.
The company will need to succeed in all its new enterprises to reverse millions of dollars in continuing losses. Trachtenberg thinks it can.
''AOL loses a million customers a month, and a lot of ISPs can make a lot of money and be happy dealing with the customers they (AOL) lose on a monthly basis,'' he said.
Some former online contenders have moved on to other things.
As Delphi chief executive, Dan Bruns oversaw Delphi's sale to News Corp. in 1993, then bought the company back three years later, sold its ISP business and set about polishing its crown jewels, hundreds of public message boards on topics ranging from politics to boating. Since 1997, Bruns and a revamped executive team built Delphi into a community portal, signing up 1.5 million registered subscribers who post 40,000 messages a day to some 30,000 message forums.
Now, Delphi is pitching its forums expertise to companies that want to add message boards to their Web sites but don't want to do the work themselves.
Since establishing its outsourcing business, Delphi has signed up PlanetAll (http://www.planetall.com), ClassMates Online (http://www.classmates.com) and News Corp.'s Fox Sports (http://www.foxsports.com) and Fox News (http://www.foxnews.com). Other partnerships are in the works.
''There's lots of competition. We're not saying this is a slam dunk,'' said Rusty Williams, a Delphi manager. ''But we do have critical mass, and when it comes to starting a community, Delphi has a good lead.''
IDT hasn't done much since acquiring Genie in 1996. The text-based online service is still home to a small group of die-hard fans of its discussion groups, and Genie continues to host a network of Brother word-processor users. An IDT spokeswoman said the Hackensack, N.J., company is planning to relaunch the service in the next 30 to 45 days but won't disclose details.
(Michelle V. Rafter writes about cyberspace and technology from Los Angeles. Reach her at mvrafter(at)deltanet.com. Opinions expressed in this column are her own.)
|
